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Mr. Evans: No doubt we will hear more about that issue on Tuesday, but the fact is that, as I hope to show, Mr. Mittal's company is anything but British.
Chris Ruane: Will the hon. Gentleman give way?
Mr. Evans: No. I want to say a little more.
Mr. Mittal was expanding his company throughout the world. He bought the Irish company in 1996, but he closed it five years later, on 15 June 2001, with substantial debts of £40 million. The Irish Government and the
European Coal and Steel Community have had to pick up the redundancy costs, but that closure had wider repercussions, as I am sure the Secretary of State for Wales knows. Allied Steel and Wire—which operates in Wales and employs more than 1,300 in the United Kingdom, more than a 1,000 of whom work in Cardiff—has to find another £5 million because the credit that it was accustomed to being given was adversely affected by the fact that that company closed, leaving debts of £40 million.Graham MacKenzie has written to the Secretary of State and the Prime Minister, but I want to know what sort of assistance will be given to companies such as his that employ people in this country and pay taxes here. Is it not time that we started to bat for the companies which have been affected? The amazing thing is that the buy-out of that company is similar to the one that took place in County Cork, where a commitment was given that no redundancies would take place for five years. With the closure in Ireland, the redundancies took place after five years and two weeks, and the same commitment has been given.
Mr. Martyn Jones (Clwyd, South) rose—
Chris Ruane: Will the hon. Gentleman give way?
On 23 July 2001, the Prime Minister sent his famous letter backing the deal to the Romanian Premier, Adrian Nastase. It said how the buy-out would help Romania with its accession to the European Union, which, I believe, the Secretary of State for Wales has intimated. Of course, we all know why the Prime Minister signed that letter within weeks of thousands of Welsh, and British, steel jobs being cut. Moreover, other people who now work in the steel industry must be aghast at what is going on.
We are told that the letter was written because Mr. Mittal is a British business man. That was later revised to a business man with British interests. We are told that his headquarters are here, but a leap of imagination is now needed to understand how the Prime Minister possibly thought that he was doing Britain a favour. It then transpired that DFID supported a bid from the company for extra help as well, because it was a British company. [Hon. Members: "DFID?"] Yes, DFID—the Department for International Development. Is that okay?
The company is British, but the fact is that 99.9 per cent. of its work force were overseas. However, it was to receive a £70 million soft loan from the European Bank of Reconstruction and Development, which described the LNM bid as "a very good project". What do hon. Members think those who have lost their jobs in Corus must think now? What do they think anyone who works in the steel industry in Wales thinks now?
Mr. Evans: We are told that the Prime Minister writes letters all the time for British companies, but what is a British company? I shall refer to a letter that David
Davies, the Assembly Member for Monmouth, wrote about a company in Wales. He wrote to the Prime Minister asking for some support on 18 February 2002:
- "I am writing on behalf of a family business, Morgans of Usk, which employs 60 people in my constituency, a rural area which has been badly hit by foot and mouth and the closure of the Corus steelworks in nearby Newport.
For ten years this company has been fighting for the release of £35,000 held by the Bank of England. The money was earned through work done on an Iraqi contract by Glantre Engineering prior to the Gulf War.
Release of this money could not be considered of benefit to Iraq. It is money held for payment to a British steel firm. Morgans of Usk is a reputable British company employing people in an area where such jobs are hard to come by.
You have stated that your intervention on behalf of a British steel company, Mittal, was not influenced by the large donation made to Labour Party funds.
I would, therefore, be grateful if you would sign a letter for the Bank of England, authorising them to release the money which could provide further employment to a steel firm which has not made a large contribution to party funds.
I look forward to the same swift and personal response for a British steel company with 60 employees as you were willing to give to a 'British' company owned by Lakshmi Mittal.
- "I am writing on behalf of the Prime Minister to thank you for your letter of 18 February . . . The Prime Minister has asked me to arrange for a Minister in the National Assembly For Wales to reply to you direct."
The water becomes increasingly murky in regard to whether LNM is a British company when we understand that a French company, Usinor, was also bidding for the Sidex plant in Romania. We now know that that French company employs three times as many workers in the United Kingdom as does Mittal's company. It has been in Britain since 1923, not 1995 as in LNM's case, and has a head office in St. Albans and subsidiaries in Birmingham and the west midlands. To use the Prime Minister's definition of what is British, that French company is three times more British—but clearly not as generous in its donations to the Labour party as Mr. Mittal's company. Even the Romanian chamber of commerce publishes LNM holdings as a Dutch company. In any event, Mittal's LNM subsidiary bidding for Sidex is based in the Dutch Antilles in the Caribbean, as we all know.
First, we were led to believe that the Prime Minister had not met Mr. Mittal. Later, however, we learned that the Prime Minister had attended a function at Downing street to thank Labour party donors, and Mr. Mittal was one of the biggest. Yesterday we learned from "The World At One"—this is on the programme's website—that the so-called controller of fundraising when Mittal made his first donation in 1997 was Jonathan Powell. We also know, according to the programme's website, that the original draft of the letter to Adrian Nastase, the Romanian Prime Minister, included the word "friend" to describe Mittal's relationship with the Prime Minister,
but that it was crossed out by Jonathan Powell, the chief of staff. Are we now to believe that Jonathan Powell placed his revised version of the letter without talking to the Prime Minister about it at any stage, or that the Prime Minister did not know who Mittal was despite having met him recently? What entered the Prime Minister's head when he signed a letter on behalf of a company based in the Dutch Antilles which directly competed with steel plants in the United Kingdom? It was shedding jobs in Wales and the rest of the United Kingdom at the time too.Even the Foreign Secretary intervened last week. He asked: "If you asked those 100 people"— Mittal's employees—
- "whether they feel better about being employed than being on the dole they'll tell you that they'd rather be employed here in Britain".
Mr. Evans: Even worse news for Wales and for steel production is that Mr. Mittal has actively campaigned in the United States of America for barriers to be erected against foreign steel entering that country. The decision will be made by President Bush on 6 March. Not only does that hit Welsh and United Kingdom steel exports, but even worse, the extra capacity from other countries that is turned away from the United States might end up being dumped in the United Kingdom market. A Labour peer, Lord Paul, has described the letter as "unfortunate" and a "slip-up". He said:
- "There is no doubt that perhaps the Prime Minister had been feeling that this was a British company . . . but it just turned out to be it wasn't a British company."
A huge number of unanswered questions relate to the Mittal affair. The premier's chief of staff, Jonathan Powell, seems to be the link man, judging by his talks with his friend, Richard Ralph, the British ambassador in Romania, the redrafting of the letter, the signing of the letter and the invitations to donors to come to No. 10. The sell-out of Welsh jobs is not just naive but incredibly damaging. The stench that pervades the whole affair is nauseating. The evasion is sinister, and the drip, drip of information damning.
From Ecclestone to the Hindujas, from Vaz to Byers, this Government have no shame. Mittal is the latest in a long list. Only an independent inquiry will finally put the issue to rest. If the Government have nothing to hide and nothing to be ashamed of, let us have that inquiry now.
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